Border Processing (Arrivals and Departures) Levy Bill

I move, That the Border Processing (Arrivals and Departures) Levy Bill be now read a first time. I move that the Border Processing (Arrivals and Departures) Levy Bill be introduced to amend the Biosecurity Act 1993 and the Customs and Excise Act 1996 to create an obligation on arriving and departing air and sea passengers, plus crew, to pay a border clearance levy. The levy will fund the costs of border processing incurred by the Ministry for Primary Industries and the New Zealand Customs Service and ensure that border services are sustainable going forward.

Our border staff work incredibly hard to prevent and stop threats at our border. The success of New Zealand as a trading nation depends on making sure these risks are controlled and managed so our economy can grow and prosper. As our trade and travel links have expanded over recent years, not only have the numbers of travellers entering New Zealand increased but also the diversity of those travellers has grown. Today we have more travellers arriving and departing from more locations than ever before and commercial air and cruise operators are continuing to look at opening up new routes to New Zealand. This is good news for New Zealand but it also brings with it an increased risk at our border. Border clearance activities are driven directly by the volumes of travellers arriving at and departing our shores. This has been steadily increasing, with international passenger numbers rising by 3.5 percent a year, and this trend is set to continue and may even expand.

The border clearance levy will help the Ministry for Primary Industries and the Customs Service futureproof border services as it allows the agencies to meet the demand of increasing traveller and also crew numbers. It is obvious that both agencies must be able to manage the growing risk of biosecurity incursions and harm from prohibited goods or persons and be able to put New Zealand on a sustainable platform for the future. We only have to look at recent incursions like the southern saltmarsh mosquito, which cost $77 million to deal with over 12 years, or didymo, which cost $10 million in 2004 and the ongoing costs associated with didymo of around a million dollars a year, and the Queensland fruit fly in Grey Lynn this year, which is likely to cost around $17 million. This is why we have a multilayered biosecurity system that has continued to be strengthened.

The Border Processing (Arrivals and Departures) Levy Bill makes important amendments to the Customs and Excise Act 1996 and the Biosecurity Act 1993. Amending these Acts means there will be a consistent approach to consultation, implementation, and administration of the levy. The Customs and Excise Act did not include a suitable provision to authorise a levy and the Biosecurity Act provides the ability for only a general levy-making provision. The overall effect of the bill is to impose the obligations to pay the levy and to provide that the detailed levy design be set out in levy orders after consultation.

The detailed design will include, for example, when and how the levy is to be paid, who is responsible for collecting the levy, and the rate of the levy. It is likely that the cost for passengers arriving and departing New Zealand will be around $22 inclusive of GST—around $16 on arrival and up to $6 on departure—but further modelling and consultation with stakeholders and the wider public needs to be completed before the final amount is decided upon. Officials are preparing a discussion document outlining the proposed options, which will be released for public feedback in June this year. It is proposed that the levy will take effect from 1 January 2016 and I expect it will be added to the price of tickets purchased on or after this date.

The border clearance levy is just that—a levy. It is a payment by a specific group for a specific purpose—in this case, border clearance functions and activities carried out in relation to the payers of the levy. Levy funds will go into a memorandum account and will be used only to pay for Ministry for Primary Industries and Customs Service border clearance functions. The fundamental principle behind the introduction of the border clearance levy is that it is fairer that the travellers who generate the need for these border clearance services and who benefit from them contribute to the cost of these activities.

Many other countries have a passenger levy in place to cover these costs. At $22 the proposed border clearance levy will be set lower than in most other countries. Australia currently charges around NZ$58 and the UK’s long-haul passenger charge is almost around NZ$150. An additional charge of around $22 is unlikely to stop travellers coming to New Zealand. It is less than 1 percent of a long-haul international airfare, which is a very small component of people’s overseas travel costs. Some biosecurity events could have a significant impact on tourism. In the UK during the foot and mouth disease events in 2001 the total tourism revenue dropped by almost £8 billion, which, if you equate that to today’s Kiwi dollars, is around $15 billion.

I am proud to bring this bill into the House because I have always said that biosecurity is my No. 1 priority as Minister. The primary industries are the backbone of the New Zealand economy and we must protect them from unwanted pests and diseases. The primary sector makes up around three-quarters of our merchandise exports. It is worth around $35 billion a year. It is the hard work of our farmers, growers, and fishers that helps us as a Government pay for things like schools, roads, and hospitals. We are fortunate that our isolation has helped protect us but we must always be vigilant and prepared for new and emerging risks. The introduction of this levy and the injection of almost $27 million from Budget 2015 into biosecurity will further strengthen the overall biosecurity system. It will go towards improving import health standards, more detector dogs, and more X-ray machines.

Also, in April this year I announced Biosecurity 2025, a project to refine our biosecurity strategy out for the next 10 years. This will be looking at how we can strengthen the overall biosecurity system to make it resilient in the future from the growing pressures of trade and the increase in tourism numbers, as I have already mentioned. This bill is another important step in protecting our borders and I commend it to the House.

💬 Rino Tirikatene: Thank you, Mr Speaker. [Interruption] I am pleased to be able to—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I have not even called the member yet, mainly because I am getting some noise from Mr Bennett yet again. He is on a bit of a warning.

I am pleased to be speaking in the first reading of the Border Processing (Arrivals and Departures) Levy Bill. Let me state at the outset that Labour is opposing this bill, so be prepared for a long night ahead. We are opposing this bill because border processing is adequately funded from the Crown and there is no need to be imposing a travel tax on the good folks of New Zealand.

Let us look at this. This is a travel tax that is going to be levied on every traveller, every passenger, families going on their trips, and our important tourists whom we rely on coming into our country. It is a tax that will be put on everybody. For the privilege of leaving our shores folks will be paying an extra $22 for the round trip. The same applies to international visitors, whom we want to welcome into our country. An extra tax is going to be put on them. This is one more tax that is being put on Kiwis, and it is another broken promise—another broken promise from this Government.

We have seen time and time again in this Budget the broken promises in terms of the imposition of taxes, and this is yet another one. The Government is taxing Kiwis, ordinary Kiwis, who want to go on their trip overseas. It is taxing them when they go to see their loved ones. It is a broken promise. We may want to argue around the terminology. It is very clear—you might want to call it a border clearance levy but it is still a tax. It is a tax, and even John Key cannot explain the difference. When John Key was asked, he said: “Oh, google it.” He did not even want to front up. But I tell you what—we did not need to google it. We just went to the Oxford Dictionary. And what does the Oxford Dictionary say? The definition of “levy” is a tax raised by levying. So whether it is a levy or a tax—“potayto”, “potahto”; “tomayto”, “tomahto”—they are all the same. They are all the same. Soccer, football—they are both the same. This is yet another broken promise from this Government. The imposition of a tax is a broken promise.

Let us spare a thought for the people in the New Zealand tourism industry, because they are the ones who have been let down by this Government with this measure. They have had a casual Minister of Tourism, who has just flip-flopped along, trying to say: “Yes, this is what I’m going to do for our wonderful tourism industry.” And what has he done here? He blindsided it. He blindsided the tourism industry. It had no idea this was coming. The Prime Minister was talking to the industry just a few days ago and it was completely blindsided by this.

The irony is that the Prime Minister, the casual Minister of Tourism, has been advocating for, and working with, the industry to try to encourage major markets for our international visitors to bring down or eliminate their travel taxes. Yet now he is going against the work that has been going on in the New Zealand tourism industry in Australia and in the UK. He has done a complete about-face, and he did not even have the courtesy to give a heads-up to the New Zealand tourism industry.

Let us not forget that the tourism industry is the second-largest generator of foreign exchange earnings for our country—in excess of $10.4 billion. It brings in a lot, and it knows that when the Prime Minister was asked about this, he said that it will not make a blind bit of difference—not a blind bit of difference. How does he know that? Because just a few years ago he was trying to advocate on behalf of our industry to try to make sure that we can have a freer passage to bring down those travel tax costs for our visitors. So there you go—a flip-flopping, casual Prime Minister. You know, there is a Twitter handle going now. The Prime Minister flip-flops so much he has been called “Jandal John”—more flip-flops than Number One Shoes. That is what John Key is: “Jandal John”. If you look up that hashtag, you can see all the flip-flops that this Prime Minister has done, and there are plenty of them in this Budget. The tourism industry has been let down. The tourism industry has been incredibly let down.

I want to move on and look at what this tax is going to be paying for. Of course, we do want increased border protection bolstering our biosecurity systems. Everyone wants that. We like to see the little beagles at our airports and increased X-ray machinery. We like that.

💬 Hon Member: Who should pay for them?

They are already paid for by the Crown. Crown funding has paid for that. And now the Government is passing that on to everyday Kiwis and everyone who wants to go on a flight overseas. If we look behind that, what else will the tax be paying for? I want to mention four letters that you rarely hear about these days out of the Ministry for Primary Industries and the New Zealand Customs Service—JBMS, the Joint Border Management System. Remember that? That was the great merging of the IT platforms between the Ministry for Primary Industries and the Customs Service.

💬 Hon Dr Jonathan Coleman: What does it stand for?

Joint Border Management System—the JBMS. What we have seen is a failure of the Ministry for Primary Industries and the Customs Service to deliver on that system. It is 3 years too late and $30 million over budget, and we still probably will not have it by the end of this year, which is the due date. It has been put off, it has been delayed, it has been costly, and it has been shrouded in secrecy. That is right. This Government has been trying to put a veil of secrecy over it because there is a major dispute. There is a major dispute going on with IBM, the contractor. The Government has had crisis talks after crisis talks, trying to work with IBM. A hundred million dollars has been tipped into this project and we still have not seen the delivery of a first tranche or anything. Risk and intelligence—what has been delivered under the Joint Border Management System for risk and intelligence? Nothing. Risk and intelligence are totally lacking.

So what will this levy be paying for? What will people be paying this tax for? We need to know what the true cost will be, because what we do not want to see is that this levy is just subsidising the Budget blowout of the Joint Border Management System. That is what this tax will be doing—subsidising the cost blowouts. We know that it is not just a cost recovery. It is not a simple cost recovery exercise, because there is very broad discretion given to the Minister. Sure, there is consultation that has to take place, but at the end of the day it is at the very broad discretion of the Minister to set these levies.

Once the taxes have been set, there will be no end to what the greed of a Government and a Minister will show in terms of collecting revenue. It is a cash cow. Picking from travellers is an easy cash cow. Rest assured, the Government will be using this to subsidise the big black hole—the $30 million black hole—we already have at the moment with the Joint Border Management System. That is the real scandal of this Government—that the people of New Zealand have invested $100 million into that system.

Sure, we have got a trade single window and people can import cargoes in terms of the freight industry, but what about the core of that system? The core of that system was to modernise and have sophisticated new tools of risk and intelligence. What happens in that regard? What does the Ministry for Primary Industries and MAF Biosecurity New Zealand pull out of the Joint Border Management System? You never hear about it. It has been taken off the agenda because it is a disaster. It is an absolute disaster, and this is just a cynical attempt by this Government to raise revenue to try to fill the huge black hole that has been created by that failed system. We are not going to be getting out of it. It is going to be getting worse and worse.

This is a poor piece of legislation. It is another tax. We oppose it, and we will oppose it all the way to midnight. Thank you.

I support this first reading of the Border Processing (Arrivals and Departures) Levy Bill, simply because it will amend the Biosecurity Act 1993 and the Customs and Excise Act 1996 and will put in place a border clearance levy for arriving and departing passengers. I would just like to assure the member Rino Tirikatene that this money is only for cost recovery for border services, and the money will be paid into a trust account ring-fenced only for border services.

I would also like to point out to the member Rino Tirikatene that the Joint Border Management System is actually progressing very well, that increasing numbers of exporters are using it, that it has been well and truly supported by the industry, and that we have just recently renewed—[Interruption]

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I apologise for interrupting the member, but the member—[Interruption] Who was that?

💬 Hon Nathan Guy: Me.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Stand up, and withdraw and apologise.

💬 Hon Nathan Guy: I withdraw and apologise.

The ASSISTANT SPEAKER (Hon Trevor Mallard): I will now indicate to Rino Tirikatene that he must not wander around the Chamber interjecting. He can interject from his seat.

I just wanted to draw to the attention of the member Rino Tirikatene that the Joint Border Management System is doing very well, that it is well supported by the export industries, and that we have recently signed a renewed contract with IBM because it is doing an excellent job for us.

Let me get back to the levy, though. It is what this bill is all about. The levy will fund the costs of border processing—only border processing—incurred by the Ministry for Primary Industries and the New Zealand Customs Service. It will ensure that border services are sustainable. I think if we reflect that over recent months many of the Opposition members have been talking about increased security at our border, and have been talking about increased biosecurity at our border, I expect that members of the Opposition will be supporting this bill because this will make our border safer. As the Minister for Primary Industries has just said, our success as a trading nation is about making sure that the risks at our borders are controlled and managed so that our economy can grow and prosper. As our travel and trade links expand and travellers entering New Zealand become more numerous and more diverse, with them they bring increased risks. More passengers arriving and departing New Zealand from more locations means more risk—more risk to our security and to our biosecurity. The interesting thing here, of course, is that higher-risk passengers require higher levels of intervention, which increases passenger clearing costs. If we cannot manage that growing risk, the frequency of biosecurity incursions and harm from prohibited goods and persons will increase. New Zealanders do not want that.

Demand for the Ministry for Primary Industries and customs border clearance activities has been steadily increasing over recent years. International passenger numbers have been rising at about 3.5 percent every year, and forecasts are for even more than that. It is an increasing upward trend. What is more, the numbers of people who are coming through our borders are increasingly international people. Whereas in the past large numbers of people coming through were New Zealanders, now just over 40 percent of people coming through our borders are New Zealanders. The vast majority are international passengers. About 95 percent of the travellers cleared at the border are crew and passengers from commercial airlines. About 4 percent are crew and passengers from passenger ships—cruise liners, and they are increasing—and the remaining 1 percent are from private aircrafts, yachts, cargo ships, or the military.

Up until now, the New Zealand taxpayer has been covering the costs of all these services, even though many of those travellers are not New Zealanders. In fact, as I have just said, significantly more are international travellers, and many of them are coming on luxury cruises and on pleasure trips. It does not seem right to me that every New Zealander—man, woman, and child—is paying $23 whether they cross the border or not. That is a tax, whereas this is a levy that the people requiring the use of the services and the people bringing the risk will be paying. The levy will be funded to maintain existing service levels and the current high level of risk management. Many other countries have a passenger levy. They have got it; it is international best practice now to do that. In our case, ours will be about $20, give or take, and it is really on the low side. What we are seeing is that overseas countries have much more. Australia has A$55, or NZ$58. The UK’s long-haul fee is £71, or about NZ$150, and Canada and the US are similar.

This Border Processing (Arrivals and Departures) Levy Bill makes important amendments, as we have said, to the Customs and Excise Act 1996 and the Biosecurity Act 1993. The reason we have to do that is that the Customs and Excise Act does not currently have a suitable provision to authorise a levy, and the Biosecurity Act provides for only general levy-making provision. Amending these Acts will make sure that we get a consistent approach to consultation, implementation, and administration of the levy.

💬 Carmel Sepuloni: Consultation?

Implementation, and administration of the levy.

The Border Processing (Arrivals and Departures) Levy Bill also includes provisions that allow Orders in Council to be made for the levy’s administration, including the rate of the levy, the basis on which it is set, and how the levy is to be paid. The levy will take effect on 1 January 2016, and it will be applied to tickets purchased on or after that date. It is proposed that the border clearance levy will be set at different rates for arriving and departing passengers. That reflects the differences in clearance costs because, I remind you, this recovers only the clearing costs and what happens at the border. So this will reflect the differences in clearing costs between people arriving and people departing. The total costs for passengers arriving and departing will be about $20, inclusive of GST—about $16 on arrival and up to about $6 on departure—but this will be teased out during the consultation phase. The cost of processing arriving passengers is higher because there is no biosecurity screening at departure and the level of customs resources and intervention at departure is less.

Stakeholders and the general public will get a chance to have their say about this levy, about its design, and about its implementation, and the details will be consulted on. Officials are already preparing a discussion document that will outline proposed options, and that will be released for public feedback in June.

The intention is to make the border clearance levy simple and easy to collect. It is proposed that the existing payment systems are used to collect the levy. The airlines will make a monthly, lump-sum payment to the Civil Aviation Authority, and cruise ship operators will pay the Customs Service. The funds will then be allocated to the Customs Service by the Ministry for Primary Industries. For other travellers, such as people on private yachts and airlines, the levy will be collected from them directly as they enter and depart New Zealand. The border clearance levy is less than 1 percent of the international airfare, so it is a very small component of people’s overall travel costs. The additional charge of about $20 is very unlikely to have any bearing on the traveller’s choice of destination.

The people of New Zealand told us that they want a safe and secure border. This bill will protect New Zealanders and will protect our environment. I commend the bill to the House.

This debate is about the Border Processing (Arrivals and Departures) Levy Bill. The first question I would ask this House is: when is a levy a tax? When is a tax a levy? And when is a tax not a tax? Well, we found out today that we know when it is and when it is not: it is when the Prime Minister says so. That is when it is a tax and when it is a levy. [Interruption] For the member opposite sitting at the back who immediately interjected, a tax is raised by a levy. This is a levy and it goes to a tax.

This is a tax. Make no bones about it—this is a tax. For the listening public and the people in the gallery, tonight, here, late in the day on this Saturday afternoon, this Government is forcing through under urgency a new tax on New Zealanders. This debate is all about a brand new tax—never mentioned, never canvassed. I have to say, the old saying of “No taxation without some representation”—no representations were made to the Government to bring in this new tax. It is just a very sneaky little manoeuvre passed under urgency. That is why we will oppose it. We will oppose it because it was not a tax that was ever canvassed with the public of New Zealand. Did the National Party go to the electorate and say: “We are going to raise a new tax. We are going to put it on travellers arriving and departing—on New Zealanders and on foreigners.”? No, it did not. This is a very sneaky, sneaky little tax.

I have to say I am particularly disappointed in the Minister of Tourism, who happens to be the Prime Minister, because he was at a tourism conference 2 or 3 days ago. Did he mention that he was going to bring in a tax on their industry? Their Minister—their own Minister—goes and speaks at a conference. “Jokey John” was there.

💬 Kelvin Davis: “Jandal John”.

It was “Jandal John”. He was there. He was there with the jokes and the smiles and the laugh. Did he tell them that he was going to bring in a sneaky little tax and pass it under urgency on a Saturday afternoon? No, he did not. He did not raise it, and he never gave any—any—indication at all to a very, very important constituency.

The Nats want this debate out of the way as fast as possible because they know—they know. They came to us, and they wanted us to agree with it and to get it out of the way as fast as possible, for one reason: they are embarrassed. They are embarrassed because they are bringing in a new tax, and it is being brought in by a Prime Minister who can perform gymnastics with the truth. He can do the double backflips on anything he likes, and we have got plenty of examples. “No new taxes.”, he said, so he raised GST. “No new taxes.”, so here tonight at 10 past 5 he sneaks in a border tax on New Zealanders and on foreigners. He breaks his promises like he breaks his eggs into the pan in the morning. He could not even deliver on the promise to give New Zealand a panda. That is how many promises he breaks.

Yesterday, Mr Key was asked what the difference was between a tax and a levy. When asked the difference between a tax and a levy, the Prime Minister’s answer was: “Many”. When he was asked again, he said: “Google it.” Then, when asked a third time, he said that he could answer it: “… but I’m not going to bother.” “I’m not going to bother.”, and that is a quote. The Prime Minister could not bother to tell New Zealanders what this was all about, whether it was a tax or a levy, or why we were having it. He just could not be bothered. I have to say that, having claimed that many times—like one of those biblical characters who did it three times—he said it was for biosecurity. He finally said it was for—[Interruption] That was Judas, if you wanted to know. The Prime Minister said it was for biosecurity.

Well, let us look at the Government’s record on biosecurity and at the hopeless, hapless Minister it has got who is the Minister for biosecurity. He has been hopeless in this position. He has let more insects and bugs into this country and put more things under threat than any other Minister in the history of this country. He cut the staff and he cut the funding, and now he wants to replace it by putting a levy on New Zealanders. What a sham. If it were really about biosecurity, Mr Minister, why not increase the levy on the ports and on containers? That is where you find most of your biosecurity risk, not the odd person who might inadvertently have an apple in their bag—in fact, most of them are caught because they go past one of the sniffer dogs. It is in your containers and over your ports, so why not increase that levy? Oh no, there is no answer to that.

This bill is a sneaky attempt to grab money from hard-working Kiwis who want a holiday. In its own documents, the Government says the most hard hit will be those going on short-term trips across the Tasman. For New Zealanders, probably the only trip that they can really afford is going across to Australia, and so they are the ones who are going to be mainly hit. What has been the reaction once they found out that this sneaky little tax was going to be introduced into this House? Air New Zealand said it was very surprised. It said that it will add to the cost of the ticket. Then it asked a very good question, and I hope that the Minister can answer this question. If it is really about biosecurity, it asked, what biosecurity or customs risk do New Zealanders who are leaving New Zealand pose? What is the biosecurity or customs risk that New Zealanders who are leaving pose?

💬 Hon Nathan Guy: That’s the immigration process.

No. The big argument, Minister, is that it is for biosecurity. Your Minister Nicky Wagner, who just sat down—she talked all about biosecurity. So, tell me, what is the risk in someone taking their bag and going to another country? What is the cost of a departure, because this is imposed not only on people coming into New Zealand but also on departure? The airline industry, which probably knows a little bit about people coming and going, actually, asked that question, Minister. I hope tonight, when you get into that chair—

💬 Hon Nathan Guy: I’ve answered it.

Well, you can sit in the chair and answer it properly, instead of just yelling across the House. The airline industry wants to know why it is going to be charged on people leaving New Zealand.

Let us see what the Board of Airline Representatives of New Zealand said. It said that the tax was “in breach of an understanding reached between the Government, airlines, and the tourism industry in 2003”. Did the members opposite know that there was such an understanding—that there was an understanding that has been in place since 2003? It was honoured for all the 5 years of a Labour Government, but broken, like its promises, by this Government. It breached an understanding, which means that its word is worth nothing—it is worth nothing—when an understanding is made. The Government announced this; it did not consult on it. It did not say: “We’re going to do this.” National has brought it in and it has breached an understanding between the Government, the airlines, and the tourism industry. You cannot trust those members.

The airline representatives also said they were “disappointed that the Government itself would harm the tourism industry.” That is what they said. They are surprised that the Government itself would harm their industry—a $10.4 billion industry. Tourism New Zealand—what did it say? It said that taxes imposed in other countries had had an adverse effect on travel. Now let me go to the final point that I want to make. In December 2011 the British Government announced an increase in departure tax for air travellers to New Zealand. The Prime Minister went to Britain. He “slammed the decision”, saying it would place “a significant burden on New Zealand businesses, on families who travel,”. He said that it was a “tax” and he said it was “discrimination on the basis of distance”. That was said by the Prime Minister in 2011. He opposed this passenger tax in Britain. He flew there at the taxpayer’s expense—he flew there at the taxpayer’s expense.

💬 Hon Nathan Guy: It’s $150.

I do not care how much it is, Mr Minister. It is the principle—the principle. The principle—it is a tax, and our Prime Minister flew to Britain to oppose it. He flew there to oppose it. He got headlines in the media. He got on the front of the television news because he said it was discrimination. Well, I will tell you, Mr Minister, what it is. It is a double standard, and it is what we expect from the National Party. Those members make promises that they break on a daily basis. They say: “No new taxes.”, and they put in new taxes—the biggest one, of course, being increased GST, which hurts the people who have the least in this country. Then tonight they are sneaking in a tax that they never consulted on. They have no right to bring it in.

Well, the last speaker, Annette King, certainly showed up her leader. She got more words out in 10 minutes than he got out in 20. Unfortunately, that speech was about as factual as his speech was the day before yesterday. I just need to point out a few facts in the process of supporting the two Ministers who have spoken before me on the Border Processing (Arrivals and Departures Levy) Bill. For a start, a levy is a levy, a rate is a rate, and a tax is a tax, and clearly the Labour Party has not worked that out. Secondly, the Government is charged with running the country. The Labour Party has clearly forgotten that it had a turn at doing that a while ago and did not do much of a job of it.

The issue we have got here is that we have a large number of people coming into this country, demanding a service of this country, and creating a threat to this country in that we need to protect our border at all costs. We now have some 5.2 million people coming here annually. Well over 55 to 60 percent of those people are foreign visitors coming to this country. We have seen from the fruit fly just very recently in Auckland that there is significant risk to New Zealand.

I just want to make a couple of other points before I finish. Firstly, the taxpayers of New Zealand have been paying for this service for a long time. The average taxpayer in my electorate never leaves this country. The interesting thing about this is that most of the people who use this service are people who can afford to pay for this service and, consequently, I think there is a very fair way of allocating a levy, or a charge, to achieve a result for this country that will be much better than what we have seen before. It gives us some security, it gives us a permanency of payment, and it alleviates the need for a large number of New Zealand taxpayers who never use or have an interest in this service to contribute to it.

One other point I want to make in this debate is that this country is significantly tested around infrastructure by the large number of visitors we have to this country. I think it has been pointed that some 5.2 million people came to the country last year. In my electorate I have a couple of little towns, Sanson and Bulls. Some 14,000 vehicles a day go through those towns. Those local ratepayers or taxpayers have to pay every bit of that bill. I think this is just another case of exactly that sort of thing going on. I have a great deal of pleasure in supporting this bill. Thank you.

I call James Shaw. Before the member starts, with the barracking across the cross benches it is very difficult to hear. So please give some courtesy to James Shaw.

We seem to be starting this bill where we left off with the Telecommunications (Development Levy) Amendment Bill with some rather cunning linguistics. When is a tax a tax? When is it a levy? When is a levy a tax? When is it a rate? “What’s in a name? That which we call a rose by any other name would smell as sweet;”. That is where we started yesterday with the telecommunications legislation—was it a tax, was it a levy? Actually, who cares? Who cares what the language of it is. It is revenue that the Government needs to charge to cover its costs.

The Green Party has never been particularly afraid of this notion. When the Government wanted to reduce, and did reduce, the top income tax rate and reduced the Government’s revenue by about a billion dollars a year, which has led to record deficits and an inability to cover its expenses, we argued against that. It is OK. Sometimes you have to raise taxes in order to cover your costs, and the Government is doing that. It likes to pretend that it is not, by calling it something that it is not. But actually we know it for what it is. We commend the Government for raising the revenue that it needs to raise in order to cover the costs of running the country. That is completely fine. Bill English has raised or extended any number of taxes. The Government has raised GST, it has raised the petrol tax, it has removed the paper boy levy, and it has put a tax, I think, on private jets. Yesterday we extended an existing tax, which is the telecommunications development tax—ah, levy rate.

💬 Hon Members: Ha, ha!

I am sorry. I am just pulling your ponytail. Whether it is a matter of double standards or broken promises, that is OK. It is a National Government. We expect that.

Let us talk about the substance of what this is about, which is to raise revenue to cover the costs of biosecurity and customs. The purpose of this bill is to introduce international passenger levies, which will be used to fund the costs of biosecurity and border control relating to imported pests, diseases, illegal drugs, and contraband. The measure is expected to raise about $100 million a year. These are costs relating only to international passengers, not to goods and freight, which are already covered by other border levies, taxes, and rates.

The Green Party is supporting this bill. We think that it makes sense for a number of different reasons. First of all, it takes a cost of the industry, essentially of the tourism industry, that has previously been externalised to the New Zealand taxpayer, and it internalises that cost back into the industry. That cost has been borne by the public at large, through general taxation previously. The benefit, of course, comes back to the economy through international tourism and so on, but this is a much more direct and transparent way of making that cost apparent. Also, given that a significant number of the people who will be charged this tax, levy, and rate are foreign tourists to New Zealand, we are managing to raise additional revenue from people who are visiting this country, as opposed to the New Zealand taxpayers.

Secondly, we have, and I have, criticised the Government for a habit of corporate welfarism in the past, which is to use general taxation to hand out to industry players in general. Both with the telecommunications development levy and this one, this is a much more direct and accountable way of raising these revenues and internalising those costs that are otherwise externalised. So we think it actually increases transparency and accountability to do it this way.

Another reason we are supporting it is that it ties revenue to actual numbers and actual costs. So as passenger numbers increase or decrease, the amount of revenue will track directly to that and therefore costs will expand and contract, based on actual passenger numbers, whereas there is some inefficiency if you do it just from general taxation. The costs are borne by travellers in this case, like I said, many of whom are international guests to the country and all of whom are generally people who can absorb this cost. As one of the Ministers who spoke previously to the bill said, this will account for less than 1 percent of the total cost. If you are paying $1,000 to come and visit New Zealand, another $36 on top is not actually going to make that much difference. Most other countries have airport taxes in place. I lived in the United Kingdom for most of my career, most of my adult life, and the airport taxes there—to go in and out of Heathrow will cost you something in the order of NZ$142 and in Australia it is about $58. So our $36 in and out charge is actually pretty reasonable.

The Green Party has in the past called for the use of airport taxes to fund the Department of Conservation estate. Given that the vast majority of international travellers to New Zealand are people who are coming to look at the conservation estate and to take advantage of it, that would be a direct way of helping to fund the cost of the tourism industry on the conservation estate. Also, the cost of promoting, essentially, the conservation estate is borne in large part by a number of local authorities. There is some room to expand this in the future. Given that the levy that has been suggested here, of around $36, is a pretty low rate, there does seem to be some room in the future to bring that up to the median rate of airport taxes around the world, which could be used for those other purposes as well. So it sets a precedent to create some other opportunities in the future.

I understand that the industry has a number of concerns, and again, because we are sitting under urgency, we are unable to have those voices represented, either for or against the bill, through the select committee process. That is unfortunate, as with all bills under urgency. Horticulture New Zealand has said that it is for this because, obviously, it is deeply concerned about biosecurity incursions. Because biosecurity funding was cut some years ago by this Government, there have been an increasing number of incursions. The cost to the economy of that is really substantial. So what this bill does is it restores some of the funding that was previously cut, and I can understand why Horticulture New Zealand would be keen on strengthening our biosecurity.

Air New Zealand, Auckland Airport, and New Zealand Airports Association are obviously not in favour of this bill, and I can understand why. They have some concerns that it will affect our international competitiveness. It would be great if this was not an urgency debate and if we did have a select committee process where we could hear some evidence for and against that. I understand the industry concerns there. There are passengers who are price sensitive. My gut feeling is that a tax of less than 1 percent of the cost of travel is something that passengers can cope with and that it will not significantly affect our international competitiveness. Flight Centre has come out and said that it is pretty ambivalent about it. Its concern would be if the people who are being charged were not getting the benefit of this. So it has some concerns as well. I just wanted to represent those concerns in the absence of a select committee process.

Having said all of that, we do have a couple of concerns, one of which is that the cost of this is both biosecurity and customs, and some of it is revenue. It is $100 million of revenue estimated. Some of this revenue is going to go to upgrade our border security and customs, including new technology, X-ray machines, and so on. We have some caution around the use of this money for new technologies that may invade personal privacy, and we would like to hear from the Government side where that money is going and what kinds of new technologies it is looking at expanding that into. The upside is that I understand they are bringing back beagles. Everyone loves a beagle. We are going to see some puppies back at Auckland Airport, which is great. Also, there are some concerns about the extent to which the biosecurity money is simply topping up what was previously cut, as opposed to actually extending the biosecurity regime as well. So we just want to hear a bit more of that sort of information.

Having said that, we do not like the fact that this bill is going through under urgency. We cannot see why it is an urgency bill. There does not seem to be anything particularly urgent about it, but, then, there has not been anything particularly urgent about any of the bills that have come through over the last few days. We are not happy about that.

We do have some concerns about privacy and about the use of the money for biosecurity. We do want the voice of industry to be represented if it has concerns that it does not feel have been adequately represented. But for all of the other reasons I stated, we will be supporting this bill in the House. Thank you.

I am very pleased to rise on behalf of New Zealand First to take a call in the first reading of the Border Processing (Arrivals and Departures) Levy Bill. This is a bill that New Zealand First would very much like to be able to support. At the moment we do not—or rather, we cannot—support it because we have some questions and some concerns that are yet to be addressed and answered. I certainly hope that as the bill passes through the stages of urgency a Minister, or Ministers, or Government members take the opportunity to address these concerns and give us some answers. I notice that the Minister of Customs has already filled in a couple of details that I was not previously aware of, so that helps to fill in the gaps. Yesterday the Rt Hon Winston Peters referred to this bill as the “Holiday Tax Bill”, and that is one of our primary concerns. We are very concerned that in fact this may be nothing other than a holiday tax bill, and I would like the Minister or someone else to reassure us that it is not.

New Zealand First has called long and loud and often for better resourcing for biosecurity. We understand just how vitally important biosecurity is for the primary sector. We know full well how important the primary sector is to the entire economy and to our way of life. There is an awful lot riding on it, and for that reason we have often and loudly called for better resourcing for biosecurity. If indeed this bill does constitute better resourcing, if it does mean more money, if it will mean more boots on the ground, and if it will mean more sniffer dogs and more X-ray machines, then those are good things that we will support wholeheartedly.

I am a little bit concerned that Minister Wagner talked about cost recovery. That sort of raises a bit of a flag for me that perhaps this is not additional money; perhaps it is just shifting the revenue stream from one source to another. That is one of our concerns. If the Ministers can demonstrate how this levy is the best way to achieve an increase in resourcing for biosecurity, and do so convincingly, then we will be supportive of that as a move. But, as I said, at the moment we do not because there are still too many questions unanswered. There is too little in the way of detail and explanation in the bill itself, and in the Government’s supporting material—its publicity material. There are some elements of that that are kind of ambiguous. There is material in the departmental disclosure statement, for example, that seems to be at odds with some of the Government’s publicity material, and it would give us great confidence if the Government was prepared to address these matters as we go through the stages and, hopefully, persuade us that our concerns are not founded.

I say that because if it does not, then there is actually no other way in which this bill is able to be examined or explained, because this bill, like the others we have been debating since the Budget, is being pushed through under urgency, so there is no select committee process. There is no opportunity for the public to make submissions and no opportunity for industry, for the primary sector, to make submissions, and no opportunity for anybody who is going to be affected to ask questions and to have input. That is the nature of urgency. When we move into urgency and pass legislation under urgency what we are essentially doing is suspending the normal constitutional processes of this House and of the country. It is not something that we believe should be done lightly, or indeed often.

But it does seem—certainly in the short number of years I have been in this House—to be becoming something that this Government is tending to do more and more often, with greater frequency. Also it seems, to me anyway, that there is less and less in the way of justification. The day before yesterday, when the Leader of the House was advising us why this bill would go through under urgency, he said: “The Border Processing (Arrivals and Departures) Levy Bill is being introduced because demand for border clearance services is increasing due to the number of airline and cruise ship passengers—”

💬 Grant Robertson: What? Over the weekend?

—yes—“arriving in and departing from New Zealand. This is expected to grow by some 3.5 percent annually for the foreseeable future, and we simply need to have the users of the services that we provide to protect our borders paying for them. This bill requires Customs and Excise Act and Biosecurity Act changes because they do not currently provide the facility to collect that levy. Urgency is necessary to allow for a period of consultation on the design”—meaning the design of the levy—“post the passing of the bill, which is the process that needs to be used. Thank you.”

So, according to Mr Brownlee, urgency is needed because this is the process that needs to be used. So it is “just because”. Well, “just because” is hardly an explanation for why the nation’s normal constitutional procedures are being sidelined. This is really a case of the Government saying to the Parliament: “Just sign this blank cheque and we’ll fill in the details later. Trust us. You don’t need to know.” So we have to ask why, and we would really like some explanation and some clarification around that.

This is only a levy-setting bill, or a tax bill, or a bill that authorises a fee or a rate—some money being paid. All it is is a bill that authorises a levy. We are not going to war. We are not declaring a republic. We are not changing the flag. I promise you we are not changing the flag—believe you me, that ain’t happening—and we are not responding to some sort of natural disaster. We are applying a fee to passengers arriving and passengers departing, and that is all. I fail to see how anything to do with setting a fee can be so crucial that we have to rush it through under urgency and dispense with normal procedure. But we will, of course. The bill will go through, with our support or not, because the Government has the numbers. The ACT Party—all of him—will happily bend over in any direction the Government wants because he does not want to bite the hand that feeds him, and United Future will also be compliant. That is just the way he has become. I recall a politician, a member of this House from long ago, who used to refuse on principle to support any legislation that was going through under urgency. That man was Peter Dunne. I wonder what ever became of him.

So this bill will go through and we will have the opportunity to ask the Minister and the Government some questions about it. We will seek to have a number of matters clarified, and if our concerns can be satisfied, then I say to the Ministers that we are capable of having our minds changed by way of sound reasoning, and we may well yet consider giving our support to the bill. Thank you.

In response to the previous speaker’s questions around costs, 55 percent of the visitors who come to New Zealand are visitors from offshore, and therefore the tax, or the—[Interruption] It is not a tax; it is a levy, and the levy will cover the costs and take the load off our taxpayers, as it should. I commend the bill to the House.

I understand that this is a split call.

💬 Iain Lees-Galloway: I understand that too, Mr Speaker.

The ASSISTANT SPEAKER (Lindsay Tisch): OK. Iain Lees-Galloway—5 minutes.

Finally we have confirmation from the member Stuart Smith that this is indeed a new tax. It is appropriate—

💬 Hon Member: One honest National Party member.

Yes, we have found the honest National MP—he will not go far. We have sat through this Budget legislation over the last 3 days, and many of us have been in the House for a lot of that time. The culmination of the legislation that has been passed through this House demonstrates to New Zealand that this is a Budget of broken promises and sneaky taxes.

It is so appropriate that this bill is the finale, because this is a bill that passes not only a broken promise but also a sneaky tax. You may be wondering how it does that in light of National’s promise at the last election. The sign I am holding says: “No new taxes”. Read my lips—no new taxes. That is what the National Party members promised to the people of New Zealand at the last election—no new taxes—yet that is exactly what they have done. They have brought legislation to this House in this Budget and introduced a bevy of sneaky little taxes because they cannot find a way into surplus.

I will give them points for sincerity, though, because it says at the top here: “A strong economy means” and then “no new taxes”. So fair enough—they cannot build a strong economy. They have not got the faintest idea how to build a strong economy, so that is why we have ended up with a bevy of sneaky little taxes and broken promises. This legislation is all about broken promises and sneaky taxes.

I am very concerned about the inflation rate on this tax. When Nicky Wagner and Nathan Guy announced it just a couple of days ago, it was going to be around $16 for people coming into the country and $6 to leave—

💬 Hon Nicky Wagner: No, no.

Do not disagree with me, Nicky Wagner, because it came from your press release. If you think I am wrong, check with the communications team to make sure that your messages are getting through. So she said it would be about $16; today, it is $20 or thereabouts. Nicky Wagner is looking confused. Read the Hansard of your own speech, Nicky Wagner, because this is what you said. It is already $20. That is a 25 percent increase in just a couple of days.

This tax is going up faster than Auckland house prices, and that is a scary thought. But hey, maybe it is not a tax. Maybe Stuart Smith was wrong—no, he was not. He is right. He is right—it is a tax. But if we accept for just a second National’s line that it is actually a levy, that does not instil an awful lot of confidence because we know what National does with levies. What does it do with the ACC levies? It keeps them artificially high so that it can try to get the books back into surplus. So maybe the fact that it has gone from $16, 2 days ago, to $20 today, to goodness knows what when it is actually implemented is actually about the Government’s plan to build up and overcharge on yet another levy so that it can try to get the books into surplus.

We know what this is. It is a departure tax. I want to advise the Government members that we used to have a departure tax at Palmerston North Airport, and the people hated it. The people absolutely hated it. They are going to hate this and they are going to see right through it. They are going to know what this is. This is just another broken promise and another sneaky tax from this sneaky National Government.

I call Steffan Browning—5 minutes.

We will be supporting this bill. We see that this sort of user-pays method to fund some aspects of biosecurity and customs processing is appropriate. But this levy is no magic bullet.

💬 Iain Lees-Galloway: It’s a tax.

It is a levy. It is a tax. It is a whatever. It is a source of income for these processes at the border. It is just a fraction of what is needed for biosecurity. We will be speaking, obviously, at another time on the total budget for biosecurity. The Government has added—supposedly added—only about $25 million to biosecurity, and that is a very, very concerning thing. This is just another revenue source. The $100 million that is anticipated in 2017-18 is only a source to basically cover the limited amount that is being used already out of other revenue streams. Biosecurity at the border needs a lot—a lot—more money.

I have put it to the Minister for Primary Industries that even if you used 50 percent of what you are going to get from this new income stream and added it to existing biosecurity money, it will still not be enough for biosecurity. Think of the fruit fly. How did it get in this last time? Previously, up in Whangarei, we thought it was probably by a yacht, and then another time, another yacht possibly. Are these people going to get taxed? Is someone going to be tapping them on the shoulder to pay their levy? I hope so.

💬 Hon Nicky Wagner: They are, as they come in, as they clear customs.

Yes, so is the Customs Service going to be there for these stray yachts—waifs and strays—as they come in to inspect them properly and to gather their tax? I hope so, because they need to be paying their part of it.

However, then we had the Auckland incursions, the more recent ones. What has that cost so far? And it is not over yet. We have to wait until spring to see whether there is a re-emergence because it was not nipped in the bud quick enough. Worse, these Queensland fruit flies actually got in here and were able to sit in New Zealand and breed for at least one generation, and, by the look of it, there was more than one generation of breeding in New Zealand because we did not nip it in the bud. Is this levy/tax going to do the job? No, it is not. It is just going to make sure that some of those people who could have been responsible are going to be paying their way.

Back in the mid-1990s, even, when HortResearch looked at the potential cost of the Mediterranean fruit fly—a good proxy for the Queensland fruit fly—the cost for the Bay of Plenty, should it get going there, was $820 million and a cost, basically, of 3,500 jobs. In the Hawke’s Bay it was $390 million with over 3,000 jobs lost, and in the Nelson area it was $265 million with close to 2,000 jobs lost. It is critical that we do biosecurity to the nth degree and do way, way better than we are doing at the moment.

I would actually like to pat the Minister Nathan Guy on the back. I have been watching biosecurity very closely, well before I was in Parliament and right through to this time. Unfortunately, in 2008, when National got in, there were significant cuts to biosecurity in this country. There was an immediate loss of almost 60 jobs, and I think a year or so later there were another 200 jobs down the gurgler in biosecurity. Importantly, many of these were on the front line. What we have been seeing is an incremental increase and repair to that. I will speak further on this in a later speech. Thank you.

I support this bill.

That was an excellent speech—an excellent speech. This is a tax. We know it is a tax. Government members might pronounce it “levy”, but it is spelt t-a-x—tax. That is what it is, that is what the Oxford Dictionary says it is, and that is what it really is. Why does the Government not just front up and admit it? The reason it does not want to front up and admit it is that at the last election the National Party promised not to put up taxes. It also promised to get us back into surplus. The whole murky tangle of web is all around this. This is about trying to narrow down the deficit by putting through these sneaky taxes and cutting our KiwiSaver kick-start contribution. Those are the things that we see so transparently that the Government is doing in order to get us back into surplus. The National Party said no new taxes; this is a tax.

Why is it that we are sitting here on Saturday night putting through a bill under urgency when there is nothing on the Order Paper? The Order Paper is empty. In a few weeks’ time Gerry Brownlee will stand up at the beginning of Parliament and say: “There is nothing to do today.”, because there actually is not very much to do. Why are we sitting here under urgency? The only reason is that we do not want to give New Zealanders the opportunity to sit down and debate this. Why would New Zealanders want to be coming in front of a select committee? Because they would point out to the Government in front of the media, day after day after day, that this is a tax. It is not a levy; it is a tax.

There is no secret as to why this Government needs to lift its game when it comes to biosecurity—not if you live in the Mt Albert electorate, which I live in. It is currently infested with Queensland fruit fly. Maybe some of the money that it raises can be used to compensate the fruitgrowers and the shopkeepers in my electorate, because they have suffered, by most calculations of the supermarkets there, 50 percent in terms of lost revenue from the sale of fruit and vegetables. They have been infested because this Government has taken its eye off biosecurity. There is nothing more important to the economy of this country than biosecurity. Steffan Browning said it before, and I totally agree with him, but he got his numbers a little wrong. It was 91 front-line staff who were cut in 2009—91. We stopped X-raying a lot of bags. We cut back on the number of dogs that were checking baggage coming into our airports. And the result is that we have had two outbreaks of Queensland fruit fly, and one of them is still alive and active. That is a desperate and wanting policy, and that is why this Government has to step up and really put some money behind it.

But that is not the end of the problem—that is not the end of the problem. The other part of it, which my colleague Rino Tirikatene pointed out, is the JBMS. That is a shocker. The JBMS is the Joint Border Management System. It was supposed to revolutionise everything coming into New Zealand. Well, it has failed. In 2010 it was on the books costing $75 million. In 2013 it had jumped to $90 million. In 2014 it was up to $104 million, and it is still not doing what IBM, which is the main contractor, said it was going to be able to do. I would like to ask Nicky Wagner, when she has a chance later on in the Committee stage, to stand up and say: “No, we are definitely not taking IBM to court.”—we are not taking IBM to court—because there is a very big rumour around town that IBM is under the gun and is going to be taken to court. This smells and tastes like Novopay, and that is another reason why this Government has to bring out another tax—another tax—to try to cover the books.

This is a disgrace. The biosecurity has let in more pests in the last 2 years than in any other time in our history, and the Joint Border Management System and the customs system is falling over and costing this country millions. This is a tax, a tax, a tax, and let us not forget it. Thank you.

I am in favour of this bill. Thank you.